When your home’s listed, the last headache you want is a key appliance or system breaking down — not only does it eat up your time and cash to repair, but it could also chip away at your asking price or derail a pending sale right before closing.
One way to shield yourself is by opting for a seller’s home warranty. Designed to cover repairs or replacements of essential household components, these plans are often recommended for buyers, especially when snagging older properties with long-in-the-tooth appliances. Yet, sellers have tailored warranty options, too. Let’s unravel how these work and the edge they bring to the selling table.
Decoding the Seller’s Home Warranty
Essentially, these are service contracts that shoulder the expense of fixing or swapping certain household systems or devices, as set out in the policy. Think of them as broader cousins of manufacturers’ warranties — the latter just guard one product, while these cover a gamut of home elements.
Typically, home warranties take care of big-ticket appliances like stoves, fridges, washers and dryers, along with the electrical network, plumbing, and HVAC setups. Structural elements — windows, doors, floors — usually fall outside the umbrella, though coverage specifics can shift and be tailored.
What sets a seller’s home warranty apart is its time-bound nature. Bought by the current owner, it’s active from the moment the property hits the market until the deal finalizes at closing. This means it’s humming through open houses, contract signing, and final walk-throughs, right until keys change hands (sometimes lingering a bit longer, since many plans run month-to-month).
Offering a financial safety net, seller warranties cover unexpected hiccups with major appliances or systems before the sale seals. Given the limited window, they’re often dubbed “limited home warranties.” They usually don’t pack the same punch as standard warranties, leaving out some smaller, standalone gadgets, and might tack on a service fee for technician visits.
Snapshot of Costs Involved
According to ConsumerAffairs.com, home warranties typically run between $36 and $68 each month, translating to $264 up to $1,425 annually. Seller warranties tend to be lighter on the wallet, averaging $300 to $600 a year or roughly $25 to $50 per month, as per Angi’s data. Pricing depends on multiple factors like provider, coverage scope, and available discounts. Seniors and military personnel often land better rates.
How Pricing Can Get Easier To Handle
In some scenarios, sellers might snag a home warranty at no upfront cost. Warrantors sometimes waive fees if the seller commits to buying a plan for the buyer, or secures coverage for their next home through the same company.
This arrangement means the warranty’s cost is recouped through the home sale price rather than direct payment — not quite “free,” but surely less of a sting at closing.
Passing the Baton: Transferring the Warranty to Buyers
Most seller warranties can switch hands to the buyer, sweetening the deal by offering them peace of mind after move-in. Knowing repairs are covered if something goes sideways can nudge buyers toward making an offer.
As Amy Cherry Taylor, a seasoned realtor and broker based in Fredericksburg, VA, points out: “The seller warranty can transfer to the purchaser at closing, covering them for the remaining term. Buyers then decide to renew it or let it lapse.”
To shift coverage, sellers must notify their warranty provider to initiate the handover, which continues protection through the contract duration. Buyers might extend the warranty themselves, sometimes subject to a modest transfer fee — who foots the bill typically becomes part of sale negotiations.
Frequently, sellers grab a warranty covering the buyer’s first year in the home to foster confidence and smooth negotiations at closing. Occasionally, buyers’ agents may step in to underwrite the cost, sweetening the transaction even further.
Why Sellers Should Think Twice About a Home Warranty
Picking up a seller’s home warranty is a strategic move, cushioning sellers from unexpected repair costs on major appliances or systems during a critical window. This means no sweating over shelling out cash for fixes on a property they’re eager to part with. It’s a handy safeguard during showings and can mitigate surprises unearthed in inspections or post-offer.
“A seller’s warranty serves as a potent selling point, signaling to buyers they’re snagging a home with reduced risk,” notes Taylor. “Even with limited buyer inspections becoming more common, having seller coverage can make your listing stand out in a crowded market.”
Buyers appreciate the assurance that a sudden, expensive breakdown won’t blindside them before closing, and both parties enjoy a layer of shared protection. Easy to hand off, this coverage keeps the safety net intact even after the deal wraps.
Granted, investing in a seller’s home warranty might feel like paying for peace of mind you never end up tapping into. Still, in the rollercoaster ride of real estate sales, having one less worry can make all the difference.
